Kazakhstan names reasons for fuel and lubricants shortage

After the national currency's devaluation, the cost of imported fuel rose causing a decrease in fuel and lubricants imports, and resulted in their shortage in Kazakhstan, KazEnergy Association CEO, Asset Magauov said Aug. 29.

He made the remarks at the association's meeting held with the participation of representatives of Kazakh Energy Ministry, National Chamber of Entrepreneurs, KazMunaiGas National Company, Kazakhstan Fuel Association, and the wholesalers and retail distributors of fuel and lubricants.

Magauov said Kazakh oil refineries do not meet all the needs of the domestic market.

According to him, about 35-37 percent of needs in light oil products are met through imports from Russia, namely 74,000 tons of AI-95/98 gasoline, 578,000 tons of AI-92/93 gasoline, 28,000 tons of AI-80 gasoline, and 378,000 tons of diesel fuel.

Magauov also noted that there is a restriction on the import of fuel and lubricants from Russia.

"But now, the restriction on imports has been lifted, and all companies can import fuel and lubricants to Kazakhstan," Magauov added.

"The measures to regulate the fuel and lubricants situation were taken studying all the possible consequences - both positive and negative," Magauov said.

"In order to limit the import, the government decided to appoint a single operator with the right of import, represented by the KazMunaiGas-Onimdery," he said, adding that KazMunaiGas-Onimdery, which was appointed by the government as a single operator at that time, suffered losses due to negative difference between purchase prices and selling prices at the filling stations.

According to KazEnergy, based on the exchange rate of Russian ruble (RUB) against Kazakh tenge (KZT), currently the AI-92 gasoline costs 159 KZT per liter ($1 - 182 KZT) and the diesel fuel costs 171 KZT per liter at Russian filling stations.

Despite this, the government was strongly keeping retail prices at the same level to provide population with low price 'social fuel'.

Magauov also noted that Kazakh market is heavily dependent on imported Russian fuel and lubricants.

"Thus, with the increasing fuel and lubricants prices in Russia, the decision to raise the AI-92 gasoline's cost was logical. This was necessary to stabilize the situation and align the difference between the wholesale prices in Russia and Kazakhstan," Magauov stressed.